SMM6 March 19, the downstream terminal demand suddenly skyrocketed in the fourth quarter of 2020, new energy vehicles, electric two-wheelers, energy storage and other markets all showed a trend of volume in varying degrees, while the price of iron and lithium, driven by strong demand downstream, has also experienced a surge since the middle of December last year. The price of power iron and lithium also rose from 34700 yuan / ton on December 17 to 50,000 yuan / ton at the end of May, with a cumulative increase of 44%. The price of energy storage iron lithium also rose rapidly from 28500 yuan / ton to 44000 yuan / ton, with a cumulative increase of 54% over the period. However, recently, the price of lithium iron has generally stabilized. According to SMM statistics, the average price of lithium iron phosphate was 50, 000 yuan per ton in May, up 500 yuan per ton from the average price of 49500 yuan per ton in April, and 1% higher than the previous month.
Source: SMM
In terms of supply and demand, on the demand side, the demand growth in the downstream domestic power market continued. In May, the output of iron-lithium batteries reached 8.77GWH, accounting for 63.6% of the total power battery output in that month, more than three times higher than the same period last year and 41.6% higher than in April. And energy storage, small power market also has a volume, downstream battery demand upsurge increases the overall market expectations, more inquiries, procurement demand has increased.
Source: SMM
On the production side, China's output of lithium iron phosphate rose to 27600 tons in May, up 4.7 per cent from 26400 tons in April. However, compared with the same period last year, it rose sharply by 168.8%. The overall supply of the industry is still showing an upward trend. At the beginning of May, some manufacturers' new production lines were officially put into use, and the overall output was still climbing. Some manufacturers with no new production lines in the short term have also upgraded and optimized their equipment and production lines, resulting in an increase in iron and lithium. Taking into account the good demand downstream, to June, China's mainstream lithium iron phosphate enterprises will continue to volume. Production of lithium iron phosphate is expected to increase to 28210 tons in June, an increase of 147.2 per cent year-on-year and 2.0 per cent month-on-month.
Source: SMM
In terms of price, although the overall market of lithium iron phosphate still maintains high demand and tight supply, the overall price tends to be stable. At the beginning of May, the production capacity of the upstream lithium salt plant was gradually released, the import volume of domestic lithium carbonate output increased, and supply and demand entered a state of game balance, while the overall price of iron phosphate was basically stable with few fluctuations. the bargaining power of the raw material price is stable and the bargaining power of the superimposed material factory is weaker than that of the battery factory, and the rising price of iron and lithium is weak and the trend is stable. In the middle of the month, the prices of lithium salt and ferric phosphate remain unchanged, and the downstream demand remains strong, while the lithium manganate market continues to be weak due to 3C demand, and the supply of industrial carbon is further relaxed. At the end of the month, with the power restriction policy in Yunnan, most of the yellow phosphorus enterprises, the important raw materials of upstream phosphorus sources, shut down, and the operating rate dropped sharply, resulting in a rapid upward price of yellow phosphorus, driving the cost of some iron phosphate manufacturers up. However, by the end of May, this part of the impact has not yet been transmitted to lithium iron phosphate, so prices are still relatively stable. However, with the upward price of phosphorus source overlaying the main contradiction of iron phosphate, that is, the continuing shortage of its own production capacity, if the price of iron phosphate continues to rise, the price of lithium iron may have an upward trend in the future.
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